Britain may soon have to force workers to start saving for retirement to cut a soaring pensions bill set to reach £120 billion in 20 years.

The government wants people to pay into their own pension pots rather than rely on the state. But many employees, with limited disposable income, have been reluctant to do this.

A scheme, introduced last October, automatically enrolls staff 22 years or older into a company or national pension plan, but gives them a choice to opt out.

So if large numbers of workers pull out because they don’t want to pay or can’t afford the contributions, the government may decide to make membership compulsory in a Pension Review due in 2017.

‘‘If opt-out rates are 50 per cent or more, it is possible the government will suggest removing opt-out altogether and make pension saving mandatory,’’ Paul Gilbody, head of defined contributions consultant relations at BlackRock Investment Management, said in a report called ‘‘Auto-Enrolment for UK Pension Schemes’’ by financial services research house Clear Path Analysis

The government’s current pension legislation is an attempt to tackle the country’s ballooning pensions bill, set to hit 8.5 per cent of economic output by 2060, from 6.9 per cent now.

Less than half of employees in Britain are putting money into a workplace pension scheme, the lowest proportion since records began in 1997, according to the Office of National Statistics.

‘‘The government are trying to stop people relying on the state to support them in retirement.’’

DEADLINE

Under Britain’s current so-called auto-enrolment system, employee and employer both contribute one per cent of pay into a pension. But this will gradually increase to five per cent from the employee and three per cent from the employer by October 2018.

Someone earning £26,200 (NZ$50,000) a year, for example, would generate £4667 of employer contributions over 10 years, based on the auto-enrolment pension contribution guidelines, according to estimates by fund manager Fidelity Worldwide Investment.

Companies with more than 120,000 employees were required to start auto-enrolment in the second half of last year. For small firms employing between 50-89 staff the deadline is July 2014.

Eleven big companies, including supermarket chains J. Sainsbury and WM Morrison have introduced the scheme. But other large firms have not done so yet.

A spokesman for Morrisons told Reuters that one-fifth of their qualifying workers, many within 20 years of retirement, had opted-out of the workplace pension scheme.

The spokesman said Morrisons supported government efforts to get people saving for retirement.

‘‘We have a large proportion of our employees in their 40s and 50s and we want them to work on voluntarily not because they can’t afford to retire.’’

A manager at fashion retailer Next said: ‘‘I figured I’m 27 and should start some kind of pension so I haven’t opted out,’’ she told Reuters. But she also said would pull out if the contributions had a big impact on her monthly disposable income.